5 mistakes you need to grow out of as an entrepreneur
Whenever I realize I have made a mistake, I get a rush of excitement and anxiety. Excited because I have had this ‘aha’ opportunity to learn something. Anxiety because usually the learning has come with a cost I cannot afford.
Entrepreneurial growth is wrought with mistakes that both hurt and help. When you start becoming aware of your mistakes, the journey of developing an organization becomes more natural and effortless. Here are a few mistakes that I have made, observed and grown out of.
Signing up for the Deferred Life Plan
Randy Komisar from Kleiner Perkins often talks about the Deferred Life Plan where you fail to do what you really want to do, but end up doing what you think is expected of you. You put your life on hold until an imagined pay day when you would retire rich. In hopes of increasing future valuation, you do not pay yourself a regular salary. You ignore your health and sleep thinking that the business will make up for it. Little do you realize that the payday needs to be everyday and not some future valuation, you do not pay yourself a regular salary. You ignore your health and sleep thinking that the business will make up for it. Little do you realize that the payday needs to be everyday and not some future event. 90% of the companies do not get bought, they simply shut shop. More importantly deferring what you desire to do to an unknown endpoint is a wasteful way of spending your life.
Changing direction too quickly
Usually things go more wrong than right. If you change direction with every jerk that the market gives you, you will not only confuse yourself, but also your team. Stick it out. If you are in the idea stage, build what you have in mind using whatever resources are available. Explore the market with what you have built for at least one and a half years before deciding to change course. Markets reward focused execution. When customers see that you are around and are consistent they trust you with their business. Be patient – it often takes twice as long the time and thrice as much the cost than what you originally anticipate.
Shying away from difficult conversations
You toggle between bottling everything up and blurting out emotionally when you cannot hold it any longer. Both approaches are wrong for you and the people you work with. Keeping quiet is not equal to being kind. A periodic outburst is not equal to having the guts to speak your mind. Develop a balanced method of having difficult conversations sounding neither unprofessional nor too soft. The more challenging conversations you are willing and able to have the better it is for your growth. Hesitating to let a wrong hire go soon enough or challenging your partners and investors or naming non-performance or tolerating mistreatment by a client are all examples of mistakes that will cost you a lot in the future.
Thinking of money on paper as the real one
The Oxford dictionary defines valuation as an estimation of something’s worth. Entrepreneurs confuse valuation as something that is concrete. Someone’s monetary estimate of your business can change in a day or on a whim. When you make business decisions with valuation goals in mind, you end up putting the cart before the horse. Instead of focusing on showy numbers such as user volume, work towards operational excellence, client advocacy, user design, cost controls and treating your people well. The latter areas strengthen the foundations of your organization that result in growth, which usually is the fuel for healthy long-term valuations.
Ignoring important but boring activities like accounting
The ups and downs of startup life give such a heady thrill that you begin to ignore less exciting activities such as timely bookkeeping. You find it boring that you need to review accounting reports, keep track of statutory requirements, follow up with people on deliverables and send invoices to clients in time. These critical aspects of running a business have the ability to derail you when things go wrong. Just as you teach children to brush their teeth twice a day, you will need to teach yourself to regularly follow through on those activities to keep the moving parts of your organization clean.
The choices you make
An entrepreneur’s life is not for everyone. You will need to be comfortable making mistakes on behalf of yourself and others and then taking responsibility for it all. You will need the ability to dust yourself every time you fall and get up with renewed enthusiasm. You will need to stay steady during the many highs and lows of enterprise building. Enjoy the ride.